Published by LawTechie - May 4, 2011 - LawTechie

In what could be the biggest government sanctioned breach of online privacy, California tax authorities propose to hire private vendors to monitor online transactions by California residents. As reported by CBS Sacramento:

Under state law, if you buy something online from an out-of-state company with no physical presence here – since you are not paying sales tax, you are supposed to pay a use tax to the State of California, but many people never do.

That could change however, under the [State tax authority] proposal, which would authorize California to spend up to $10 million to hire private vendors to track down what you purchase over the Internet.

It would seem that California has not been following the slew of recent privacy lawsuits in its own jurisdiction. At this proposal stage, it is uncertain how California’s private vendors would track internet purchases without (1) bringing legal liability upon themselves, (2) bringing legal liability upon the selling vendors, or (3) bringing liability upon California (specifically State agency leaders) for violating the Federal Wiretap Act. Time will tell.

LawTechie is a blog focusing on trends in tech and digital media. Areas covered include intellectual property, cyberlaw, venture capital, transactions and litigation as they relate to the emerging sectors. The blog is edited by the firm's partner Tim Bukher with contributions from the firm's experts in their respective areas of law.


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